Publicis Groupe CEO on Acquisition Rumors, AI's Benefits and Challenging Google

“We went through a very painful and tough transformation that is definitely paying off today,” Publicis Groupe global chief executive Arthur Sadoun told Adweek, as he reflected on the path that has led the advertising agency network to organically outperform its competitors in recent years. The group, which owns ad businesses such as Sapient, Leo Burnett, Epsilon and Saatchi & Saatchi, has invested heavily in growing its data and artificial intelligence offerings over the past six years. Sadoun said it's reaping the rewards now after facing industry derision for the direction. In the second quarter of 2023, the company revealed organic growth of 7.1% and $3.6 billion, while in H1 its net revenue was 45% ahead of pre-pandemic levels during the same period in 2019. So far this year, the business has reported $7.97 billion in revenue (7.1 billion euros), leading Sadoun to confidently predict he will deliver circa 5% organic growth for the year, having previously estimated between 3% and 5% in February. By comparison, Omnicom, which released its Q2 figures the day before Publicis Groupe, revealed organic growth of 3.4% for the quarter and matching revenues of $3.6 billion. WPP and IPG will announce their quarterly figures in the coming weeks. How Executives at Adobe, Uber, Diageo and TBWA Are Using Generative AI Today The impact of AI The company’s bet on artificial intelligence, including a partnership announced with Microsoft in 2017 and with Adobe to create content production solution PX, has given it a history of working in a space that arguably has only come to the fore with clients in the last year with the dawn of generative AI. The big difference with our clients is that they don't want to become an AI company. No one wants to become an AI company.Arthur Sadoun, global CEO, Publicis Groupe Earlier this year WPP, still the largest agency network by scale, formed an AI partnership with tech company Nvidia while at the same time Omnicom entered into a strategic AI partnership with Google Cloud. Publicis has claimed that its AI services—including integrating the technology within Sapient and Epsilon as well as the development of in-house platform Marcel—have brought in major business deals with the likes of Pfizer, Disney, Walmart, LVMH and Stellantis in the last year. “Our clients are focused on how they need to manage their businesses in what is still a persistent macroeconomic uncertainty,” underlined Sadoun when discussing AI. “The big difference with our clients is that they don't want to become an AI company. No one wants to become an AI company. They want to know about how AI can help them accelerate their business and transform their models,” he insisted. He believes that clients want to know how AI could help them to link their media investments to business outcomes and how they could accelerate their use of new media formats such as connected TV and retail media. Meanwhile, the business has been applying processes around AI internally, including across creative development and production with training taking place to upskill staff to support clients in their understanding of how to adopt the new technology. Sadoun revealed that the company’s headcount, due to the continued growth in demand, is now closing in on 100,000 people worldwide. It’s OK to Talk About AI Now: Publicis Hits Back at Haters by Celebrating Marcel in Cannes Mergers and acquisitions In the wake of speculation and reports that French media company Vivendi—owner of another agency network, Havas—could be in line to acquire Publicis Groupe, Sadoun simply stated to Adweek that “independence is part of our DNA." He believes that after having conducted several deals during H1, Publicis retains an “aggressive” M&A strategy of its own. The deals were focused on adding data and technology solutions across the business, with the likes of London-based marketing technology company Yieldify, Bulgarian performance marketing business Advertise BG, U.S. ecommerce platform Corra and a full stake in Publicis Sapient AI Labs, which was a joint venture launched in 2020 in partnership with data analytics firm Elder Research and technology venture company Tquila. “What we need is to continue to progress, enrich and upgrade our tech and tech abilities,” Sadoun explained. He also cited the record $4.4 billion acquisition of Epsilon four years ago, which he claims now sees its data “refreshed every five minutes, thanks to AI.” Challenging Google in Europe Another partnership that has begun to bear fruit is with European retailer Carrefour and the release of Unlimitail to meet advertiser demand in the retail media space in continental Europe, Brazil and Argentina. The system runs using Publicis company CitrusAd and data provided by Epsilon. Six months into the joint venture, the platform has 13 retail partners, which it claims brings together more than 120 million loyalty customers and 1.5 billion pages viewed a month. Those partners are: Kingfisher France, Groupe Galeries Lafayette, Rakuten France, Showroomprive.com, ÏdKids, Luisaviaroma, MyOrigines, Bringo, Electra Group, Maquillalia, Juguetilandia and Public, as well as two Carrefour franchise partners in Morocco (LabelVie) and Israel (Electra Consumer Products). Sadoun alluded to a vision of the platform challenging the likes of Google as a search tool, with Europe seeking a competitor to the tech giant. “In retail media, we can,” he claimed. “That's our vision, and it will depend on our ability to have more [retailers] joining the platform and demonstrating its superiority, which is always the case.”